Skip to main content

tv   Closing Bell  CNBC  January 17, 2017 3:00pm-5:01pm EST

3:00 pm
look at that belly. >> big belly. >> very big. listen, that interview that we just did, it's a serious business. those guys work hard and they put it all out. trust me, they're the ones you need on that wall. >> that's right. >> when you need them, you need them. >> good job don's johns. >> and gene's. >> thanks for watching "power lunch." >> "closing bell" starts right now. wait a minute, that crocodile was real? >> we're having a heated debate. >> that's not a computer-generated animation thing? >> i wouldn't be that cool if it was crossing in front of me, that's for sure. >> wow. >> welcome to the "closing bell", everybody. after this long weekend i'm kelly evans at the new york stock exchange. >> happy tuesday for me as well, i'm bill griffeth. four big companies announcing to create jobs here in the u.s. we're wondering is this part of president-elect trump's plan to become, quote, the greatest job producer. the details of what it means for
3:01 pm
the economy coming up. >> breaking this afternoon, exxon spending billions of dollars to make a big push into the permean basin. >> and a successful spacex flight over the weekend. the ceo will join us exclusively to sort of do a victory dance, i guess. yeah, plus after the bell, two key transport stocks are reporting their earnings. we have csx and united continental. we'll have both ceos exclusively even before they speak to analysts. that kicks off the top of next hour. let's start with the wave of new u.s. jobs and investments announced today. general motors, hyundai, walmart, bayer all making pledges to create more jobs inside our borders. john harwood has details on that plus mr. trump's latest comments on the proposed border tax. john? >> reporter: bill, those announcements are part of plans
3:02 pm
that these companies have had in motion for some time, but they note that it will protect them from negative tweets. donald trump tweeted out thanks for bringing jobs. he took credit for bringing jobs back into the united states and also for negotiating to negotiate the cost of airplanes. in particular he's been talking to boeing about the cost of air force one. he's been speaking at trump tower for the cost of air force one. >> together we're working through simplifying the requirements and streamlining the process. that will lead to substantial cost reduction. we're working this together. i appreciate the team work approach on this. i think it's the right way to do business. >> now he talked about team work there.
3:03 pm
republicans in congress may be looking for more team work because he said he didn't like the proposal that house republicans have come up for in border adjustment that would tax imports, not tax exports. that's an alternative way to achieve the same goal that donald trump wants to with his 35% puntative tax on companies that take jobs out of the u.s. they're going to have to work that out. it's not going to be easy. here's one other issue that isn't going to be easy. what to do about the replacement for obamacare because the congressional budget office is out with a new study saying if you repeal obamacare in the very first year 18 million people will lose coverage and premiums on the individual market will go up 20 to 25%, guys. >> a lot of different factors here, bill. possibly altogether weighing on the market. >> john harwood, thank you. see you later. let's get to our closing bell exchange. we have three guests today.
3:04 pm
we have rick santelli joining us from the cme in chicago. with the dow down 107 points, keith, the financials are among the laggards today. we had pretty good earnings this morning. morgan stanley turned in better than expected numbers but it's down 3%. what's going on here? >> yield curve and dollar. that's all you need to know about the financials and aside that they would get overextended. they did get over bought too far too fast. your lead in to our little exchange here was the right one, bill and kelly, where you're talking about the market has a lot to contemplate right now. it's important to watch every tweet that comes out of donald trump. you're seeing it reflected in the numbers. there's a lot of crosscurrents coming out of the president-elect's office as it relates to trade, taxation, this, that and the other thing. when you have those sorts of things you see the market moving sideways. we've had that for the last month be or so. now i will say this, some of our
3:05 pm
quantitative work has the dollar vastly oversold at this time and the euro over bought. that's a positive pattern for equities. i would expect certainly after the inauguration we start to get a little bit of lift. the proof is always in the pudding and it will be once donald trump takes office and the cabinet secretaries are sworn in and they start legislating and putting policy in place. we may not see this market start to move in any kind of form or substance for the next couple of weeks. >> i was going to ask you kind of the same question, bill, which is will we need to see and is it out in d.c., the policies that will be coming out. is that what this market needs in order to regain its momentum? >> you think about where we're at. if you really do get a tax cut at some point down the road, that will have a huge impact on financials and their earnings. we've bought the election and we're selling the inauguration. that's where we got stuck. we're waiting for which of the two story lines will play out. are we in the slow growth mode of 2, 2.25% growth gdp or is
3:06 pm
there really a seat change in how we tax and how we look at health care and more importantly the regulations? so right now i still like the financials. the point's already been made. at the same point, you need a better tax policy and if we're going to get any kind of rate move to the higher where banks can make money on their cash balances, then there's still an opportunity to buy the financials. we liked them. there's still a wait and see approach. >> you know mr. trump talking to the wall street journal saying among other things the strong dollar is killing us here in the u.s., his words. the dollar's gone down in part as a result of all of that. do you think you'll be able to talk the dollar down at a time when most people expected it to continue higher? >> well, if i had a list of every entity and person from any country that's tried to talk the currency up and down, it would be a pretty darn long list. i don't know why donald trump would be any different.
3:07 pm
listen, clinton administration, strong dollar policy. we've had people like mr. reuben who virtually said nothing but that. nobody really knew what the policy was. i think that what's going on with all markets is they go from tweet to tweet is it's going to be impossible to handicap. i still contend comparing president-elect to what the actual president sounds like on inauguration day and then getting into the first 100 days will give the markets more info. he's a bit of a flipping tweeter, i get it. i seriously doubt if he's going to be able to be able to sleigh the dollar when it is a key vital area that will be expected by normalization of central banking policy, but it will be interesting. and when it comes to things like the border tax, maybe that was just a negotiating chip. listen to our boeing guest that we just had on at the top of the show. listen, he took away something he never put in place and he got goodwill. sounds to me like he's a negotiator and he's getting his baseline ready for when he takes office. >> speaking of the transports,
3:08 pm
keith, the dow -- the dow transports are having a tough go of it today. down 120 points nearly. we have csx and united after the bell. how important is it for them to kind of contribute to more meaningful performance for transport? >> if you look at the fundamental aspects and we have talked about this, you have the transports still to this day lead the dow industrials either up or down. we see that reflected in this trade. the transports are a vital industry to the u.s. economy. they're ones that are going to have to kind of carry the dough, if you will, throughout the economy. it's important that companies like csx, all the air carriers, all the parcel delivery service companies have good, strong earnings, bell weathers for our economy. i will say it's interesting another reason why the markets are stuck, i mentioned this before. the crosscurrents of messaging coming out of the trump campaign seem to be counter intuitive from an economic standpoint. we don't want a strong dollar but we want all of the business
3:09 pm
to come to the u.s. those two things don't square with investors. that's why everybody is laying here. >> phil, what are you buying now? in the past i think you've mentioned dividend paying companies in the past. a lot of people like those for a long time but in a rising interest rate environment, that can get kind of dicey. what are you doing now? >> i haven't changed a lot. i like the preferred market. i know in a rising environment i'm going to get hurt but i don't expect rails to go a heck of a lot higher. there is a major demographic issue that's going to hold rates back in my opinion lower for longer. we're not seeing 4 or 5% interest rate. if you're earning 6%, you're buying cheap, i like that. if you want to roll the dice a little bit, you think about the energy space, an mlp, midstream story like that, thanks a lot because i'm getting paid to wait. i'm not in the camp that we're going to see blowout interest rates. we'll get a modest return. the policies are going to take time. this is not an overnight thing. this will have to work its way through the legislative bodies.
3:10 pm
talking 2018 to see some real impact. to me, get paid to wait now. >> we're going to that point on interest rates. how much has the landscape changed in the last couple of weeks from it looking like sort of parallel shift in the yield. maybe it's deepening. now it feels like everything is headed back the other direction. >> well, you know, the retracements haven't been large. i still think everything i thought about interest rates moving higher, very good probability to see 260 in place. there are many moving parts to interest rates, not the least of which is the fed. keep in mind, the dollar index has given up half its move since the election. the s&p is where it sits, 21%. even though all markets never move in a linear fashion, i think the equity markets still are giving you a very confident picture of what investors are thinking and i'm pretty sure that if they've been not under a rock the last three or four weeks, they understand that it's going to take a while to get the
3:11 pm
legislation through. >> all right. guys, got to go at this point. thank you all. good conversation today about the latest market action right now. see you later. meanwhile, exxon mobil is up after the world's largest publicly traded company increased its push into the permean basis. >> good afternoon to you guys. with oil prices hovering over about 50 bucks a barrel and most analysts predicting the worst is over, there has been a wave of investment coming through the energy industry further evidenced by exxon's doubling of its resources in the permeon basis today. xom is investing $5.5 billion. if the largest oil and gas acquisition since oil prices saw a steep decline in 2014. that's according to pls, a research firm. shares of exxonmobile trading higher in today's session. some are saying exxon may be seen as late to the game in
3:12 pm
terms of this deal there. have been a number of deals in the permean as well specifically because of the low break even. it makes it a very profitable place to do business. yesterday noble energy almost a $3 billion deal. last week wpx, 775 million. in september operator sunoco, 760 million. in fact, whit mckenzie saying oil and gas companies will increase 2017 spending and more than double new project developments. they're predicting that wti will average about $57 this year. trading just under 53 now stuck in a very tight range. so it does seem there's some room to run. back to you. >> i was reading in the journal, too, jackie, that a lot of operators dealing with the drillers are charging more. peak level prices but capacity has come down. i wonder how that's putting a little squeeze on the operators. >> you're absolutely right. break evens are going up as these kinds of investments are being made. these companies need to get a
3:13 pm
little bit more. they're betting big on the fact that the worst is over here. we have to hope that they're right. >> yeah. >> thank you, jackie. see you later. energy stocks higher. imagine what the dow would be like if we didn't have that today, right? >> we're down 91 points right now. we'll take a look at the dow 30 in a moment. under 19,800 so we have a couple of round numbers to reclaim before we even start talking about 20,000 again. >> 20,000. not happening. satellites, trains, planes. ceos of iridium, csx and united will tell us how they think president-elect trump will affect their business. you won't want to miss that as well. up next, china's president defending globalization. just days ahead of trump's inauguration and as the world awaits brittain's exit, we'll see the changing globalization in a trump world and how that
3:14 pm
could impact the world. you're watching cnbc, first in business worldwide. now we just need 500 more... translated into 35 languages, personalized oh and shared across the 7 continents. (other languages spoken) look abbot, i got it. it's a miracle. ♪ will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at
3:15 pm
3:16 pm
3:17 pm
the market lower. dow down 94 points. no record for nasdaq, down 42. the big decliner, the russell 2000. those small caps down 1.4% today. >> ouch. >> a 20 point decline. morgan stanley also lower today despite reporting better than expected revenue. the firm's trading unit raked in $2 billion in revenue. 11% higher than the same quarter last year. fixed income trading revenue shot up by nearly 60% to $1.5 billion. other financials have also taken a hit today. financial select sectors, sper, etf, xlf, all we need to say. bank of america, j.p. morgan chase, wells fargo all trading lower today. >> look at that. meanwhile, china's president defending at the world economic for flum davos. suns li.
3:18 pm
>> it would make sense for the world's largest exporter to be talking up global trade. china probably needs to open borders to sell their goods to as they try to make the difficult shift to a domestically driven economy which is why president xi jinping is in the snowy swiss alps, the first time a sitting chinese president has addressed davos. it was an upbeat message, a benevolent tone which was probably intended to contrast with the hard line rhetoric taken by u.s. president-elect trump which said the u.s. currency is dropping like a rock and dismissing chinese actions to support it motivated because they don't want us to get angry. china has spent around $1 trillion to try to prop up its currency from further weakness over the past year. xi said china has no intention to boost its trade competitiveness by devaluing the
3:19 pm
renminbi. it grew by 6.7% last year which was within the country's targeted range. back to you. >> we'll take his word. back to you. >> we have no choice. for more on the relationship between china and the u.s. let's bring in jason turner. welcome. >> welcome back. happy new year. >> thank you for having me. happy new year. >> this time last year we were having a bit of a panic attack about china and the outflows in the market. what have they done to stabilize the situation? do you expect it to stay that way? >> listen, they're still sitting on something like 3 trillion in currency reserves. that helps. part of the problem, frankly last year was the potential for policy error by the feds. fed not only tightened but then it talked about tightening four times which was clearly too fast for the global economy especially when the ecb and bank of japan were pursuing negative interest rates. i don't think the fed is going to make that mistake this year. china still has considerable problems that are going to --
3:20 pm
they're going to continue to have to try to bolster the currency. >> clearly mr. trump's gotten mr. xi's attention if he shows up at davos for the first time ever. that seems ironic to me. what do you make of the back and forth between those two? where do you think this is going, do you think? >> i think my own particular opinion, i think you have to take -- donald trump is nothing if not i think somewhat transparent in terms of his intentions, regardless of whether you like the policies or not. i think a lot of the post war trade policies were designed largely to keep the peace mainly because the u.s. had all of the economic power. the u.s. has less economic power now, especially the middle class. i think now there's going to be a realignment of interests. again, some people are calling this anti-globalization but i think it's somewhat more economic nationalism, somewhat realism given where the electorate is. >> the tricky thing to piece together is the concern about the south china sea and, you know, the concern about how donald trump might handle the one china policy, all of these things china feels strongly
3:21 pm
about, the way they might react to any kind of provocations on our side if you were to put it that way while at the same time he makes a speech about why it's so important to have globalization, their economy depends on it. which choice do you think they'll make, the one right for their economy or the one that's politically important to make? >> personally i think china's largely -- i think it's largely one to keep the peace. largely to keep the people relatively happy and chipper and avoid some sort of domestic political problem. but it still has global ambitions and i think we could as americans stand down and let that happen. i don't think that's realistic. that would be a short-term solution, not a long-term solution. so i think this confrontation, i doubt it would be a hot confrontation, but i think it was inevitable. i think as far as the currency war is concerned, the currency war is over. currency war was waged 20 years ago in the late '90s and early part of 2000s and china won.
3:22 pm
now it's a different situation where china's trying to bolster its currency. >> right. there is nothing -- in my opinion, it's ironic being lectured by china about free trade from a country that pegged its currency for so long at such a low level. to me it's a different game that we're going to be facing now. >> it was a big topic during the campaign. now he's not sure he wants to do it. it's complicated. i mean -- >> and, again, i'm hardly an expert but i do know some of the menace you do on -- men and women on the transition team. it seems to me it's being seen as too complicated. i think there may be a sense that you could do maybe a tariff perhaps on mexican goods. the currency has declined 30%. it's probably not that big of a zbleel let me ask it this way. put it back to our area of expertise. what's a company to do that is in the import/export business when there is this uncertainty still up in the air whether there will be a tax of any kind
3:23 pm
or tariff? >> as you know, can't do much. the only thing they can do is establish ties within the administration, have some sort of idea of what's happening, make sure their concerns are being heard and then make changes, make big investments, hold off on big investments and do them when you know what the rules are. >> do you think they can raise the revenue to do the kind of tax cuts and other things that have been kind of put out there to get the markets excited? >> you know, for whatever truth, my own opinion is i don't think the trump administration would care too much about the deficit for a while. i think they're going to have the ideas -- again, like it or not, i think the ideas you're making up on volume that, you know, you essentially try to get the economy running and then you worry about the deficit later, and, again, we can argue whether that's a good idea or bad idea, but i think that's the way it's going. >> we have a businessman heading to the white house and you talk about making it up in volume. >> exactly. >> the old businessm mantra.
3:24 pm
>> jason turner joining us today. 35 minutes to go into the close and the dow is declining by about 86 points today. half a percent. the nasdaq down 3/4 of a percent. russell down 1 1/2%. up next, what a fascinating story. how tiffany's flag ship fifth avenue store turned from an asset maybe into a liability over the yugsal holiday period. we'll have that story coming up. >> and later -- >> there's a bit of a fib that we like to believe in sometimes where people go, if you just do what you love. we don't always get to do what we love. could we figure out what to love what we do? >> man, i would have loved to have been a fly on the wall. >> you'll get to. >> that is matthew mcconaughey giving us his take on careers and work. you won't want to miss mr. all right, all right, all right.
3:25 pm
3:26 pm
3:27 pm
welcome back. a little more than half an hour to go into the close. we're seeing declines. the dow trying to regain the 19,800. tiffany is lower today. luxury jeweler reporting a 4% drop on same store sales in the americas for that november to december holiday period. tiffany said comp sales at its flag ship fifth avenue store the one next to trump tower fell by 14%. the company had warned back in november sales for the quarter ending this month could be hurt
3:28 pm
by protests and increased security following the election. shares down 2.6%. >> this is the definition of awkward. right? i mean, you have to believe that mr. trump and tiffany have a good relationship anyway. they're right next door to each other. >> i learned from a special we ran. cnbc has done a couple of documentaries about trump. he bought the air rights ov over tiffany's. they can't build up. they have that flag ship spot. >> am i wrong the flag ship store is maybe 8, 10% of tiffany sales altogether. >> it's a big piece. it's a bigger piece of a lot of their profits so it makes it crucial because, remember, you have a lot of tourists coming through here spending big bucks to go to that iconic location. breakfast at tiffany's, the whole thing. >> sure. sure. it's not just that flag ship store. tiffany sales overall for 2016 down 4%. >> yeah. japan i think is a brighter spot at the end of the year.
3:29 pm
again, maybe that's why the shares are down the amount that they are. still, some more tough calls have to be made about that location. let's get back to sue herera. >> hi, kelly and bill. president obama making a surprise visit to the final daily press briefing with the white house press secretary, josh earnest. he praised earnest for his smarts, maturity and integrity. >> this guy ranks as high as just about anybody i've worked with. he is not only a great press secretary but more importantly he is a really, really goodman. and i am really, really proud of him. health officials say a california bay area woman's death was likely caused by bacterial meningitis. that would make it the second fatality linked to the illness just in one week. laura robson was found dead in the back of a san francisco mini bus. a complete autopsy is being conducted. and sir elton john and
3:30 pm
mariah carey were paid millions to sing at a russian oligarch's 19-year-old lavish wedding in london. carey is said to be paid 3.1 million and elton john received more than 1 million. in addition antonio banderas gave a speech. bill, back to you. >> i'm not going there. >> i know. don't go there. keep going. keep going. keep swimming. >> thank you, sue. >> you've got it. going into the final half hour. in fact, we do have almost exactly 30 minutes left in the trading session. with the dow down 90 points joining us is mark newton, owner of newton advisers. how are you, sir? >> fine, thank you. >> usually we look at stocks and where they're going. you want to look at commodities today. why? >> it's one of the most important and technical things i've seen. it's served to help commodities rise and we're seeing commodities that bottomed almost exactly one year ago today, back in mid january when stocks bot
3:31 pm
2078d. here's a chart of the cti index. equal weighted basket of commodities. reuters, equal weighted commodity index. >> back to early 2015. >> this chart in particular goes back a little bit. what's important to realize is that last year we saw a huge move up from january to july and went sideways. just in the last couple of weeks you've seen a little bit of a breakout here that now is challenging and potentially could exceed highs bringing it back to the highest levels of 2015. important that trump's potential playbook saying the dollar could fall, dollar sounds good in practice but yet in reality might not be so good. so we've seen a little bit of rise in precious metals of late. >> yes. >> we've seen energy complex make a big comeback. now the grains have started to move back up. this has been great for material stocks, industrials. two out of the three sectors that are leading are all commodity based. that's interesting, important. my thinking is it can continue. dollar looks like it's got further to fall.
3:32 pm
we saw the pound rise substantially over the dollar. euro over 108 to 109. the yen as well starting to climb which made equities weak. right now it's all about the dollar pulling back. commodities are benefitting from that which i do think continues. >> yeah, dollar index at the lowest since december 8th today. thank you, mark. good to see you as always. >> kelly. >> you guys, heading into the close watching markets to see if we can gain any traction. the dow down 85. right on the button at 19,800. up next, this weekend's successful spacex's launch. next up iridium's talk about launching successfully into outer space.
3:33 pm
3:34 pm
3:35 pm
25 minutes left here with the dow down 80 points. down 97 i think it was at the low of the session today. i referred you to the lower part of the chart there with the russell index down still 1.4%, the secondary stocks, small caps getting hit the hardest today. >> now elon musk's spacex had a successful launch. it was the first launch since the massive explosion back in september. the launch brought along ten
3:36 pm
iridium satellites for the constellation. >> morgan brennan joining us along with the ceo. take it away. >> hey, bill. matthew, i want to say thank you for joining us today. congratulations on a successful launch this past weekend. >> thank you. >> this is the first of seven you have with spacex for your next generation satellites. it was originally supposed to be -- this launch was originally supposed to happen back in the fall. obviously with the explosion of the falcon 9 rocket back in september we saw a lot of delays there. why did you decide to stick with spacex for these launches? >> they're a great supplier. everybody's been focused on the failure that they've had, but the 28 previous successes really showed what kind of a supplier they could be. you know, they're disrupting the industry. so have we. we've been a great match ever since we started working with them over 10 years ago. we're all ready to go. we fit their rocket.
3:37 pm
it's a perfect match. we knew this would be a great flight. it wasn't too hard a decision to be honest with you. >> how much more cost effective was it to do these launches with spacex versus other competitors? >> well, we were one of spacex's first and largest commercial customers so we might have gotten a little better deal than everybody else, but really in the end it's about the same as everybody is getting today. it was half the cost of putting our satellite together. we have one of the biggest aerospace programs in history to get 70 satellites over a year. we needed to do it cost effectively or it means the business case wouldn't close. spacex had the right deal and the right platform and obviously this weekend you see they had a lot of success. >> bill griffeth here. i'm curious, speaking of costs, insurance. do you pay for the insurance, is that spacex. are you able to get cheap insurance to launch a pay load using a private company like spacex? >> yeah, that's a great question, bill. it's actually kind of a hybrid
3:38 pm
program. we're building 81 satellites and launching 70 so we decided to really, if you will, insure our first loss ourselves, but then we do buy insurance for secondary and other losses to make it pretty cost effective. that's all in our $3 billion program. it's part of that along with the launches. if there was a launch failure, spacex, we'd get a new rocket for that, but we have the extra satellites and it really wouldn't have affected. notwithstanding that, it was quite exciting this weekend, as you can imagine, and it was a big success. >> they were able to land, you know, the booster or whatever back successfully to do it again. the spacex model is incredibly disruptive and cheaper than what's out there. i read for you guys it might be half the cost of other options. frankly, there aren't other options if spacex doesn't get this right. you were supposed to launch over the summer. how long is your patience when it comes to dealing with spacex? if there are other incidents going forward, is that game over for you guys or are you willing
3:39 pm
to kind of take this startup as it learns and including if there are other incidents going forward? >> look, we've worked with them for a really long time. you know, they're a financially secure company, they're technically doing some very innovative things that no one else is doing. we've had to wait a few months, but in the space industry, that's not a big deal. so, you know, we're going to be launching with them again in april and then every two months thereafter. it's going to be a big -- it's a very ambitious schedule we have together, but really we're at brandenberg airport space. we're going to get them off this year. we're going to have our network completely replaced in early 2018 and that gives us a capx holiday and a lot of potential for iridium. spacex is the right team to be working with. >> you have pretty cool
3:40 pm
technologies included into these. you can track aircraft that have gone missing or have the potential to go missing over the ocean and whatnot. how do you secure these satellites moving forward? and are we on the verge of i guess you could say another space race where the deployment of these types of satellite constellations are concerned? >> well, there is a lot of interest in space again. back in the '90s when iridium was created. there were some failures. we've survived and thrived and has been successful. we're doing it all again. there are others looking to get into the lower orbiting tripdom. they're still a few years out and not competitive with what we do because of the approach we take it, but there's still room for many more and it's companies like spacex that's going to make it possible for all of these companies to get there because they're lowering the costs to get these new satellites into
3:41 pm
space where we can do so many exciting things. >> great. matthew daesch, thank you for joining us, the ceo of iridium. back over to you. >> morgan, thank you. matt, thank you as well. appreciate it. heading to the close, 20 minutes left in the trading with the dow down 71 points. mark zuckerberg was in a dallas courtroom defending his company in a multi-billion dollar court case. we learned how much they really pay coming up. gold seeing an uptick. the precious medal headlines. a new movie with matthew mcconaughey. we're going to talk with the hollywood star coming up.
3:42 pm
is happening before our eyes. shift in human history sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion,
3:43 pm
pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential. hey!nicole. i just wanted to think your support team for walking me through my first options trade. well, we're all about educating people on options strategies. i won't let this accomplishment go to my head. get help on options trading with thinkorswim, only at td ameritrade.
3:44 pm
welcome back. coming up in the last 15 minutes here. at leisure showing signs of strength. jcpenney and nike, the retailer and the sports apparel giant teaming up to create nike brand shop environment in more than 600 jcpenney stores. they will be located within jcpenney's men's departments. >> and i see why it makes sense for jcpenney.
3:45 pm
i'm a little interested that nike is doing it. shares are up. >> store within a store concept is pretty popular. >> jcpenney up nearly 3%. facebook chief mark zuckerberg in dallas. >> they said $2 billion. >> julia boorstin has been tracking the intellectual property case. she joins us with the latest. hi, julia. >> reporter: hey, bill and kelly. mark zuckerberg has been testifying for hours since he took the stand at 9:00 a.m. central. it's his first time testifying in a courtroom. he's defending occulus. alleging that occulus john car mack who previously work at betomox stole technology. also alleging that occulus signed a nondisclosure agreement. the attorney is raising questions about whether facebook did adequate legal due diligence on the deal.
3:46 pm
zuckerberg saying he had no knowledge of the nda and he believes that those accusations are false. this afternoon much of zuckerberg's testimony is laying out his vision for virtual reality and why it's so important for facebook. he also talked about the crucial role facebook is playing in enabling oculus to launch its head sets. he explained the fast time line of how this deal got done. one interesting revelation, facebook actually paid $3 billion to oculus. in addition to the 2 billion price tag, facebook paid an additional $700 million to retain employees, another $300 million in earnout payments for hitting key milestones. bill and kelly, certainly some big numbers being discussed here. >> this is what happens when they have to testify in sworn testimony. i have an idea. from now on when we interview -- when you have the ceos on, put the hand on the bible first, then we're sure to get the real
3:47 pm
story. >> it was so fascinating. >> it's been interesting enough just the fact that he's even there to testify, right? >> reporter: well, he made the point that he's there because he has heard these accusations and they are not true. he's there to talk about them. it sounds like we have a producer inside the courtroom right now. it sounds like the jury is fascinated to hear what zuckerberg has to say, as is the judge. the judge made a joke. he's so interested in pong, in the old video game pong. zuckerberg has been talking about what the potential is for virtual reality. this is obviously a case that is fascinating for us but also must be fascinating for the jurors in the room. she said at the beginning of the day people were so excited to have zuckerberg in there. the longer he's been testifying, he's been on the stand for hours, he lost that celebrity glow. they're curious what he had to say. >> very interesting. julia, thanks. see you later. 13 minutes. pong? >> i'll explain later.
3:48 pm
shows you how old the judge is. >> the s&p is down 8. russell down 19. >> the recent run in the markets has been called the trump rally. one investment strategist said it's a global reflation rally. we'll explain what that is coming up.
3:49 pm
3:50 pm
3:51 pm
art cashin said they have a bias to the up side. $320 million to buy. not a huge amount. kind of take the edge off the selloff that we've seen so far today. let's take a look at some of the top stories moving markets today. president-elect trump's comments on the dollar weighed on stocks early on. during an interview over the weekend he said that the dollar is too strong and that it could impact u.s. companies. the broader market being weighed down by the financials which are the biggest laggard today. the staples and some of the retail names have been the outperformers today. that sector up over 1%. joining us now gabriel santos and sam stoval. welcome to you both. we've had a retracement and then maybe some. what do you make of that? >> we think it's a normal period
3:52 pm
of consolidation. as we're getting near to the inauguration. we're having expectations meet political reality here. so in our mind it's absolutely normal to see a period where the market is trying to figure out what kind of measures are actually implemented versus which ones are not. in our mind that is still quite positive for the u.s. economy, even independent of political changes. >> sam, we're trying to figure out what's going to happen this year. usually traditionally the first year of a new president's term that first year is pretty tough because that's when they do all the hard work, right? >> exactly. especially during a republican term in office the market has actually declined almost 3% on average, fallen four or five times. one reason is because every republican president since 1900 has experienced a recession in their first two years in office. so let's hope that history does not repeat itself this time around. >> so that goes back to, you know, what do you kind of play the markets based on the
3:53 pm
political calendar here? i guess this one has been so important to the fact that the trump rally has happened. what are some of the other factors that should be, you know, moving us one way or the other here? >> we think there is a broader global reflation rally going on here. just improvement in real economic growth as well as inflation that's expected for 2017 and, again, independently of any sort of political implementation in the u.s. and abroad. so this fundamental that we start off with, rather than trying to play different political scenarios, we start off with the solid back drop which leaves us feeling cautiously optimistic about equities. >> financials, i'm going to talk to you about that. the earnings have been pretty good. >> yeah, they have been. >> expectations were high. they've met the expectations. stocks have gone down. is that the fact after the rumor? >> i also think we have a know nothing week. we are waiting to see the inauguration as gabriella has said. the market has risen an average
3:54 pm
of 1.5%. risen 7 out of 10 times in the first 100 days. the electorate and investors are hoping to get positive news out of the new administration. >> all right. good stuff. good to see you both. >> thank you so much. we're heading to the close here. 7 minutes left. the dow is off the lows down 76 points. and then after the bell it's a doubleheader. we have earnings and ceos. we'll hit the rails with csx spgs ceo michael ward and oscar munoz.
3:55 pm
3:56 pm
this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at and get up to six hundred dollars.
3:57 pm
coming up on the last three minutes of trading. do you know what traders were thinking? to this point the trump rally was led by goldman sachs. so we get the earnings from the big banks starting last friday and we were going to get blowout numbers and it was going to cause a rally and it was going to put us over the top, the dow 20,000. hasn't happened obviously. especially today is another good example of that. good earnings from morgan stanley this morning. that stock is down 3%. the dow continues to pull bhack away from 20,000. the dollar at an eight-week low. the dollar index, no, that's going back to december 8th. it's gold that's at an eight week high. the dollar index is down to a level that we haven't seen since
3:58 pm
december 8th. president-elect donald trump telling us that he thinks the dow is too high killing the united states especially the companies that are in the import/export business. the dollar is responding accordingly. what's going up as the dollar goes down? that would be gold. two-month high taking us back to november 17th. to that high. we're back comfortably above $1200 now at 1215. earnings let's mention morgan stanley one more time. united health also had good looking earnings this morning. both those stocks are trading lower today. now bob pasani we look to tonight. united continental and csx. we'll have the ceos both coming up on "closing bell." >> we're getting something very interesting. we're getting a slight unwind of the best as we go to the encore. stay long the dollar. stay short the u.s. bond market and go long forecast. the russell 2000. that's unwinding a little bit.
3:59 pm
all of these things here going the other direction here today. we have mentioned before that this is largely sideways. today there's a little bit more technical damage. i think you're going to hear overnight some of the comments from the stock technicians about modest technical damage that really hasn't happened until now. you're going to start hearing that. a lot of people are dieing for a 5% correction so they can buy more. there's an underlying bullishness. that's why i'm doubtful this will go very far. >> you still don't see the vix moving very much. >> no. >> still below 12. a lot to handle. >> that's another side of the underlying bullishness. people have been asking me about morgan stanley, what's going on. there was nothing wrong with their earnings report. it was fine. tradings report was fine. the stocks had a huge run up. people trying to figure out what the numbers are going to be in 2017. >> morgan stanley up 60%. >> and more than 20% since the election. it's been an amazing run overall. i think it's going to figure out
4:00 pm
the price is right now. we need a little more priority on what the trump deals are going to be. >> thank you, bob. see ya later. we go out with a minus sign for all the major averages today. we get ready for important earnings tonight. united, continental and csx. we have the ceos of both of those companies coming up on the second hour of the "closing bell" with kelly evans and company. see you tomorrow, kel. thank you, bill. welcome to "closing bell", everybody. i'm kelly evans. here's how we're finishing up the session on wall street. down day across the board. the dow jumping 56 points on the bell. down much more than that on the final hours. we came back a little bit. still 19,829, well shy of that you know what level. the s&p 500 down about 6 or 7 points at 2267. the nasdaq dropping 2/3 of a percent today, 5538. the russell small caps down almost 1.5%.
4:01 pm
1352 is the level for those small caps. now coming up we're going to get earnings from a couple of big caps and a couple of big transport companies. morgan brennan is standing by to cover csx. susan li will bring in results of u nighted continental. thank you both. see you shortly. on the panel we have cnbc markets commentator michael santoli, michael yushicami and mayflower's pm larry glazer could kick things off here. welcome, everybody. markets broadly, i get that. why was morgan stanley down so much when it had its best quarter. >> it's become a favorite position of everybody coming through here it seems. had treasury yields down again. you had the dollar down again and dollar up, treasury yields up been a very integral part of the story to the feds and having a lot of clearance to raise rates a few times this year and of course the yield curve itself is a thing that makes money.
4:02 pm
i think all of those things working together across the board you've got the popular trade tested today and financials have been a big one. >> exactly. kbe is worth more in six months. michael, the same way during the trump rally the banks leaning away. if they're rolling over the whole market stalled here. how much lower do you think this thing goes? >> well, i think you're definitely seeing the trump rally roll over at this point. obviously staples is one of the best performing areas of the market and was one of the worst performing areas of the market just 60 or 90 days ago. how much farther to go is anybody's guess. i agree with what was said earlier about -- from bob pasani that there's a lot of underlying buyer pressure. people are sitting there waiting for the market to go down, begging for the market to go down 5%. i think the 5% number is very, very reasonable. 5% doesn't sound like a lot but
4:03 pm
from a headline stand point that's like 1,000 points. if the market starts to drip downward you'll start to see people come into the market. there's still plenty of people that have missed this rally. we hear this from investors all the time when i give speeches and do appearances. people are waiting for opportunities. so if that comes, i think you're going to see resistance to break below 5%. >> one mitigating factor, larry, might be how strong the credit markets are right now. we have been off to a rip roaring 2017. people are out there raising a ton of money. one of the best records on -- is the credit market that strong? >> this has been an anticipatory rally. you could have the ronald regan redux rally. lower taxes, less regulation. recognize, the markets could be sometimes wrong. in this case the president-elect talking about the dollar being
4:04 pm
too strong. that might mean that the markets have the trump trade wrong. perhaps the markets should be considering maybe everything we've been building into this rally has been incorrect. maybe the president saying look at some of the areas that maybe have been left behind. look at some of the international markets that might benefit from a weaker dollar. look at something like the u.k. markets. so perhaps we should listen to the president when we argue what the trump trade really is. the trump trade can change. this is a guy who's built on change and that's i think what we're seeing today. we're seeing reversal in the leadership. that might be a sign of things to come, kelly. >> it is, mike, fascinating to say look at the drop in the dollar index today. almost a full point because of the comments that trump was making over the weekend about strong dollar's not necessarily a good thing. here he's taking a point off of this. i guess what does that really tell us about what direction is ultimately headed and how much depends on figuring out this border tax? >> that's exactly it. it wasn't that the president-elect said the dollar might be too strong, he also said that this border tax proposal was a little bit too complicated.
4:05 pm
i think that honestly investors might be very receptive to the idea that this proposal may be too complicated. it seemed convoluted. it came an almost mechanical investment. you had dovish words from bill dudley this morning saying we can go slow. all of it working against the dollar. honestly i do think that it all makes sense and fits into the idea that we're in a period like september, long sideways range, digesting a rally. the thing about the 5% decline everyone's wanting supposedly is in theory it sounds great. if we're down 5%, trust me, we're going to be -- >> hair on fire. >> nasty, ugly headlines. we're going to think it's a bigger reason. >> so true. i wanted to mention this countervailing force as well. baby boomers beginning mandatory withdrawal from their retirement accounts. the oldest boomers are hitting 70.5. wall street journal had a big story on that. it could add up to hundreds of billions of dollars. michael yoshikami.
4:06 pm
if you think the performance is all about flows and you're telling me some of the most invested people in the market have to get that money out or face big penalties from the irs, you know, is that built into these models here? >> well, i think what you have to recognize, kelly, for investors if they're unaware when you're 70 1/2, the year you're 70 1/2 you have to take the minimum distribution out of your retirement account. if you do joint he can peck tans si, that's a 3, 3.5% number and it increases every year. we're seeing in our clients that they are forced to take it out. they don't need to take it out. what do they do with that money? first of all, they do one thing which everyone hates to do, which is they pay the taxes on distribution, ordinary income tax, right? they're rolling that money right back into the market. oftentimes investors that have these minimum distributions simply don't need the cash flow. so is it modeled in? i don't know. i don't think it's going to be this huge event which is going
4:07 pm
to be a huge movement out of equities. i think it's going to go back into after tax equities coming out of a retirement account. >> sure, kelly. i would just add that one thing that is potentially unfair, many would consider the idea you're forced to take this money out unfair, but also unfair is the new department of labor regulatory changes that are making it more difficult to get this money out of the plans because the money has to go to a fiduciary. in fact, you're forced to take the money out. they're prone to make it more difficult to get the money out to the place you want to go. you are paying taxes on ordinary income along the way. it's hard for investors to figure out like it's a great policy in your best interests. it's a demographic issue. they need income. they're clearly taking money out of the market and it's going to put pressure on the financial market as the withdrawals happen. >> maybe pressure on that rule you mentioned, too. csx has reported earnings. morgan brennan. >> reporter: hey, kelly. mixed results from csx reporting
4:08 pm
adjusted earnings at 49 cents per share. that was one cent shy of what the street was looking for. revenues, beating, however, $3.04 billion versus $2.89 billion. some other metrics that investors look for, operating ratio. that came in at 67%. that was better than 69.6% that had been expected. and volumes, there was an extra week in terms of volumes for csx this year. including that extra week total volumes for the quarter were up 5%. if you exclude that week they were down 1% for 2016 overall volumes were down 5%. so, again, a miss by 1 cent on the bottom line. a beat on the top line. take the shares of csx were down 1 1/2%. back over to you. >> thanks, morgan. in a couple of minutes to break down the results for us.
4:09 pm
here's a quote about the dollar. the strength of the u.s. dollar, but coal being the single biggest factor. >> i think the bar was pretty high for what csx had to deliver in terms of where the stock is. if you look at the stocks way up on a high purge giving a lot of credit for a comeback to growth in 2017. so i do think you're going to see a lot of ceos not just point out 2016 has dollar head winds. going ahead from here. if the dollar gets much stronger it will be a continued issue. on a year over year basis it's not that dramatic. it depends what other currencies you're dealing in. >> also looking here a couple different ratios. operational ratio, merchandise piece of it. you know, the bottom line earnings that were being here to have the transports having a horrendous day. they had run up quite a lot. what signals do you take from this, if any?
4:10 pm
>> the biggest signal i take really is if you look at what happened, as was mentioned earlier when reagan came into office, and, granted, it was a different scenario, we were in a recession at that time, how long did it take for that stimulus really to impact stocks, impact earnings. if you look at the numbers, you go back and study exactly what happened. it took a year for that actually to impact companies in a significant can't way. it's not shoveled in the ground in the next two weeks. so i think mike was correct saying it's a pretty high perch right now based on expectations of what's going to happen in 2017 even if we have tail winds for infrastructure names and other more industrial names. it's going to take time for that to filter through earnings. and i think you're going to continue to hear that in these earnings releases, not only what's happening with the stronger dollar but just ceos trying to caution the market. don't get too excited. it's going to take time for any
4:11 pm
stimulus efforts by the president-elect actually to hit corporate earnings. >> yeah, because they know otherwise what goes up will come down. michael and larry, thank you guys for joining us. >> thank you. we have some news out of washington. what's happening, john harwood. >> kelly, we've got one result from our new nbc/wall street journal poll in advance of donald trump's inauguration. one of the questions that swirled around the president-elect and also does he accept the intelligence's community's conclusion that russia hacked the election by getting into the democratic computers. intelligence community says yes and donald trump says grudgingly yes. the american public, this poll shows, 51% majority accepts that conclusion. they say that they do believe that russia interfered with the election. 36% say they did not. then on the question of whether or not donald trump has too close a relationship with our traditional adversary russia as president vladimir putin, 33% of americans say, yes, he's too
4:12 pm
friendly with putin but 24% say no and a 43% plurality say they don't have an opinion on that. so this is something that's looming in the back drop. of course, the question about the president-elect's commitment to nato and other traditional american foreign policy stances in opposition to russia, all of those are on the table. 33% of the american people begin his presidency concerns that he's too friendly, guys. >> yeah. interesting though, john, i see
4:13 pm
here 26% says they believe he would have lost the election had the hacking not occurred. >> that's right. we had questions about, a, do you think it affected the outcome of the election? 36% said, yes, it did. 26% said it hit the outcome. a majority of the people say, no, it didn't, or they're not sure, 74%. opinion is not clear on that question of the effects. this is something that the u.s. intelligence community did not attempt to assess. president-elect trump said it had no difference in the race. >> people making up their own minds. thank you, john. united continental's earnings are out. coming up oscar munoz will join us. snap, inc., founder devin spiegel and bobby murphy owns less than half the company's stocks but they'll get more than 70% of the voting power once it goes public. you're watching cnbc, first in business worldwide. with the xfinity tv app,
4:14 pm
4:15 pm
anything with a screen is a tv. stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today.
4:16 pm
welcome back. united continental out with earnings. susan li has that. >> let's get to revenue. it turned positive in the fourth quarter last year advancing to 9.1 billion which beat street estimates calling for just a little bit over 9 billion. as for earnings per share, still down year on year but up 1.78 to where analysts were looking for $1.73. passenger revenue which is a key gauge for airlines is down in the quarter, down just about
4:17 pm
1.5%. pretty much in the range that united had guided for and improved outlook for fourth quarter guidance that we gave a few weeks ago. at the beat we're looking for guidance past year revenue for the current quarter, we don't have it yet. delta actually got it for a better first quarter. it's very important for the airlines. back to you. >> thank you, susan. united shares now turning slightly positive and the company's ceo oscar munoz will join us shortly to discuss these results. what do you make of it, mike? >> looks like about on target. i still think these stocks have come back so far they're giving them a lot of credit for things turning better. earnings projected to be down in 2017. i think the big question is have we seen maybe the best in terms of investor performance from this group at this point? we'll have to hear what he has to say about this. >> precisely. meanwhile, as investors wait to have snap chat parent snap,
4:18 pm
inc., go public, investors won't get any voting power. that leaves the company's co-founders with 70% of the voting power even though they own less than half of the company. for more let's bring in steve groton from alpha venture partners. welcome, steve. >> hi, kelly. how are you? >> well, i'm good. i'm wondering what you make of the snap news? is it just another iteration that's kind of google and, you know, media company control thing or is this kind of a new and dangerous frontier? >> probably a little bit of both, but as you know, more and more have become more founder friendly and for the very best companies they're yielding more and more control and oftentimes we'll forego even some information at times. i'm not saying that's the case here with snap, but it's definitely trending in the private market. whether or not this is too far,
4:19 pm
about 10 to 20% of companies have this type of dual structure, and this is a bit of a hedge case. >> certainly they're being more aggressive in trying to institutionalize the founder control. even if you were a public investor in facebook and google, they've always done these maneuvers to make sure that the founders retain control. this is kind of just essentially side stepping that process that might happen down the road. i just wonder if any investor would really think twice if you actually believe in the founder's investigation for the business, which to me is a bigger story about whether you'd want to buy into the ipo. >> i think that's what the beauty of having a public market is is that we're going to find out whether they can actually share these -- actually sell these shares to the public with these types of lack of voting rights. >> you know -- >> and so -- >> yeah.
4:20 pm
go ahead, steve. >> yeah. so, i mean, if -- if the market is going to determine this so, you know, is the supply and demand type situation. if big institutions say, hey, this is going way too far, we're not going to support this ipo, they're not going to get this right. >> well, that's what i was going to ask. you can easily imagine a company going public, maybe doesn't have the voting structure, just kind of one share, one vote. people want to own a piece of it. they like what the founders are doing. great. what happens two, three, five, rp)s out? are those market forces going to be brought to bear to push the company in the direction it needs to go? and certainly look at what's happened obviously with some of them, viacom. it's taken to an extreme. >> yeah. no, those are -- those are all really good points and, you know, time will tell. i'll tell you in the private sector, in the private market
4:21 pm
what often happens is, sure, the founder essentially has control. they have -- sometimes they'll have a majority of the board, they'll have the management team reporting to them, but at the end of the day if they're not performing and they start running out of cash -- >> yeah. -- guess who has control then? and if the stock -- if the stock starts plummeting massively, clearly the public markets aren't happy with the company and the ceo -- >> yeah. >> -- and they're running short on cash, so that's the ultimate arbiter. if you think about facebook which has some controls on -- has founder friendly shares and facebook as well, this has been to a degree to the advantage of those companies and to their benefit. >> yeah. >> the problem, as you point out, not every benevolent monarch ends up being so benevolent in the end. only time is really going to tell. we just -- you know, it's hard
4:22 pm
to say. >> just wondering if you're still in the seat for problems. i respect what they're doing. they've had to kind of fight through it. in the case of snap chat to get people to understand what the product is. >> thank you. >> steve brotman there. shargs of csx, we told you about their earnings. they're lower after missing the estimates by 2% or so. now heading down by 3%. the company's ceo, michael ward, will join us exclusively to discuss the results and why he thinks president-elect trump will be good for both his business and the economy. also ahead -- >> it's a story about a guy who starts off at the bottom, throws hail mary's and catches them himself. >> "the wolf of wall street" now matthew mcconaughey has made this film gold. he's told us about his latest wall street connection later on the "closing bell." mark for ave.
4:23 pm
yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?
4:24 pm
4:25 pm
welcome back to breaking news from president obama. eamon javers, what's happening? >> reporter: president obama is largely commuting the sentence for chelsea manning. she was known as bradley manning who first put wikileaks on the map with a massive leak of u.s. military breaches. exposed for the world to see. she was sentenced to 35 years in
4:26 pm
prison. according to the white house just now, that sentence will be commuted by president obama in one of his last days in office. manning was scheduled to be released in 2045 and instead now she will be released on may 17th, kelly. >> wow. so commutes the entire thing. thank you. >> it's the dramatic power the presidents have. you remember, this set off a huge wave of global controversy at the time. >> oh, yeah. >> there's been some speculation about whether chelsea manning's sentence would be commuted. there's been a campaign afoot to pardon edward snowden as well before he leaves office. that's seen as much less likely than the chelsea manning case. chelsea manning has had some difficulty in prison. has reportedly attempted to commit suicide a number of times and has had an enormous campaign of support for her as well publicly. >> just a few days left. president obama this afternoon. eamon, thank you. >> you bet. csx shares moving lower
4:27 pm
after hours. the company reported a 1 cent miss on earnings. there we go. they're down about 3%. there's some suggesting the trump economy can and only be good for railroads. michael ward is the chairman and ceo of csx. hello, michael. >> hello, kelly. >> so there's a couple of different places to start here. there's the coal challenge you guys are still dealing with. there's a lot of bigger picture stuff to discuss. so perhaps more than anything i'm interested in how much momentum you think the economy has right now out there. >> well, we're encouraged, kelly. if you look at the first three quarters of the year, industrial production was on average about 2% decline. it actually turned slightly positive in the fourth quarter, up .4%. our car loans went up year over year. positive momentum going into 2017. >> you were one of the first and only ceos michael who kind of
4:28 pm
said to us during the campaign that donald trump could be good for your business. what are you thinking now having seen the trump rally and some of what followed? >> what's interesting, like many others who are interested to see how the administration deals with the agenda, but the things they have talked about i think would be very positive for the overall business climate and certainly for csx. talked about more balance of regulatory environment, tax reform. they've talked about infrastructure investment, public and private and talked about enhancing and increasing manufacturing jobs in the domestic economy. all of those things as they put those into place will be very good for our economy. >> what about the border tax? let's put it differently. issues that make perhaps a dent in the amount of stuff you guys are moving into the country and moving out. >> well, we don't have a lot of the business coming out of the automotive side. we have a limited impact on us. obviously that's a very complicated issue.
4:29 pm
i'm sure there will be a few twists and turns before that's resolved. but i think overall i think what he is suggesting is going to be good for our domestic economy. >> michael, what about the implications for non-commodity business, intermodal. is it not dependent on trade of one or another even if it's not with mexico? >> it is. right now current forecasts, we will grow. intermodal business, mike, came out in line with the economy which as our forecasters tell us in the 2, 2 1/2% range. clearly the strong dollars does have an impact on imports and exports. if you look at it, the dollar's been strong for the last several years and it's increased in strength this year and yet we're still seeing the economy grow modestly and apparently building a little bit of momentum. >> sure does seem so. i also want to highlight the cost savings that you point to
4:30 pm
in your $4.4 million in annualized savings. what is that based on? in other words, your assumptions about how much other businesses like coal might come back. is that permanent productivity enhancement or is that something that might actually have to be added back at some point? >> most of these are permanent decreases. if you look at our normal run, it's been about $150 million productivity which we did get this year. we probably also saved about another 150 million by lessening some of our infrastructure because of the dramatic decline in coal business. we've done running longer trains which has contributed over $100 million. we expect next year there will be in exsession of $150 million historical pace that we've had and as you said, it's pretty remarkable this year, almost $430 million worth of savings and that's in addition to the 175 million we saved just by having less volume out there.
4:31 pm
our volumes were down 5% of the year. in total we had cost savings over $600 million. >> let me ask you, michael, about jobs and also about trump tower. have you been in touch with the president-elect yet? do you anticipate doing so for any specific reason or just kind of having those lines of communication open? and many of the other businesses right now are coming out with big and bold investment plans and job creation announcements. will you guys be among them? >> well, as you know, we have great paying domestic jobs which are not exportable, as a matter of fact. we will be doing some hiring next year largely to a place of attrition which we see normal attrition. i've not been invent vieted to the trump tower as of yet but we're fully supportive of good, high paying jobs which we now produce for our employees. we have about 27,000 of those great jobs in our company. >> michael, thank you for joining us. let you get to many other things to deal with on earnings day. >> all right. thank you, kelly.
4:32 pm
>> michael ward, the cfo of csx. continental shares are lower. up next, we'll hear exclusively from ceo oscar munoz and whether the carrier is seeing domestic fares firm up. after, matthew mcconaughey joins us to discuss his latest wall street role as well as, you know it, his biggest money mistakes. you do all this research
4:33 pm
4:34 pm
on a perfect car, then smash it into a tree. your insurance company raises your rates. maybe you should've done more research on them. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claims centers are available to assist you 24/7. call for a free quote today. liberty stands with you™.
4:35 pm
liberty mutual insurance. welcome back. it was down arrows across the board today here on wall street. the dow was down 58 points, 19,826. the nasdaq and russell did the worst today. the nasdaq down 2/3 of a percent, 35 points, 5538. small cap russell down nearly 1.5%, 1352. closed. down transports down 102 points. united, the third largest. trading lower after hours. the carrier reported better than expected earnings and issued weak first quarter guidance. cnbc exclusive and we're joined by oscar munoz. >> hi, kelly. nice to be here.
4:36 pm
thanks. sandwiched between my old friends at csx and mr. mcconaughey. >> i know. it happens. it was like a normal show around here. at any case, the thing though is that it appears to be your discussion with phil lebeau is part of the reason why people are saying this is a quote, unquote, miss of the first quarter. some excitement or anticipation that maybe it would be a positive number and it's nearly flat. >> yeah, well, flat is good and it's the fourth quarter of progressive sort ever improvement. i think the industry as a whole is seeing great momentum. it's looking like it's going to be positive soon. >> i want to make sure i'm getting this right here. delta that phil was speaking with, oscar. at any case, you're still flat in the first quarter and as you said, flat is good, but what do you see shaping up for the rest of the year? what could be there? >> listen, it's hard to tell. it happens closer into the time of the quarter and so what we
4:37 pm
see in the first quarter is what we've got with regards to flat. as you get out into the yearbookings you don't have as good of a sense. our crystal ball is not as clear as others. again, we understand the nature of the business and what's more important, especially over the last few weeks, momentum with regards to our business bookings has been very solid and positive. we hopefully see that continue. >> i was going to hit on that, oscar. do you have any greater visibility? we've seen things like the ceo confidence surveys hit highs. general sentiment among business people seems to be good. is that something that you think is going to build throughout the year? what's your visibility on that? >> well, our visibility, again, as i said, closer to the quarter we've got a better sense but, again, we work with what we have and what we see over the course of the last few weeks, again, it's been very positive and so, you know, the business roundtable, all of the different surveys, everything that you and all of us see has been great.
4:38 pm
unfortunately the market today is not reacting in the way we'd like to. that taper usually follows this time of year where people are selling off and doing all the things you've been discussing all day. from a pure business perspective, the things that we manage and control are people, are resources, our level of service we see a very positive outlook for united. >> how's it been going with this tiered model that allows people to take a cheaper flight without being able to check the bags that we were talking about last time? >> yeah, no, listen, that will go on sale this quarter for flying in the second quarter. so we're still in the process of ensuring that we have all of our ducks in the row with regards to the procedures and ensure that all of our customers are understanding what they're buying and make sure that when they do fly they have a pleasant experience. >> and you mentioned what the market has been doing, kind of drooping. it could be any number of things, but it does appear they want more certainty about tax overhaul, some of the pro business things coming out of the trump administration. would you put yourself in that
4:39 pm
category? how important is it to see some action coming out of the white house? >> well, listen, i'll echo what michael ward said before us. i think we're all looking for the things that are being said and to some degree speculated that would happen would be good for business. it's too early for me, in particular united, to sort of ascertain whether or not those will come to be, but the most balanced regulation, tax reform, infrastructure investments are very critical, whether it's airports or roads. important for us is air traffic control and the modernization that's been such a critical need for our nation for so long now. >> the u.s. carriers have tried to make the case that some of the overseas airlines have been sort of subsidized in a way that makes it unfair. is that an effort that you think would be revived under president trump? >> you know, whether that's under president trump or any administration, i think it's a great debate and conversation to be had. we certainly have our viewpoint but i hope that it is, indeed,
4:40 pm
revived, not only revived but certainly moved forward. >> finally, oscar, you mentioned the air traffic issue. is it privatization, is it a satellite based closure i was just reading about to kind of enhance our visibility and where planes are in the sky exactly? what modernizations need to happen? >> yes. something has to happen, right? we keep having the debate as to which one is better than the other, public versus private, the type of technology. the fact of the matter is that every day we don't do something over time the safety and efficacy of all airline travel in this country is going to be affected. we look forward to moving forward with any one of the ways at this point in time. >> understood. thanks for joining us, sir. >> thanks. >> oscar munoz, ceo of yunited. one key concern for the national retail conference.
4:41 pm
we'll head there live. but, first, matthew mcconaughey is back on the silver screen, and this time he's taking on gold. up next, the actor weighs in on his latest movie and his biggest money mistake. you're watching cnbc, first in business worldwide. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app,
4:42 pm
so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.
4:43 pm
one of the largest business process companies in the world. whether it's in health care, customer care, technology, transportation or government. we touch millions of lives every day. conduent. advancing the everyday. welcome back. new movie "gold" tells the tale of teddy wells based on a real life gold mining mogul. he went from a red hot venture
4:44 pm
and said it was about chasing the american dream. >> i don't make movies that i can't love. it's usually the second, third, fourth side kick in movies. and this is a movie about a guy, a dreamer, and who's going to hustle, if a nagle, create, wield his way into the american dream. he's a great american arcetype. miss and american capitalism is made by the entrepreneurs, not the ones that set up the structure, you get a job, you work your way up. you get a job, work your way up. nowheres else in the world do you have the opportunity to fail as much as you do here and still get a 55th chance to succeed. this is a story about a guy who starts off at the bottom, throws hail mary's and catches them himself. >> it sounds to me like for you it's the kind of success story about capitalism at a time when
4:45 pm
i often associate hollywood with kind of drawing our attention to everything that's wrong with it. >> well, because you couldn't say -- if you say "wolf of wall street" is about greed. you wouldn't say this is about greed. "gold"'s different than money. it's about the chasing down of the dream. he cashes the check. then in the movie say he didn't get the check. if there was gold or wasn't gold, if he got the money or didn't get the money, i'm not sure kenny wells would have that different of a reaction. it was the chasing of the dream. he's not a guy that's going to retire and get in his rocking chair and say i made it, he's going to create some other or have some other epiphany. my dad had some kenny wells. every day he woke up, threw his legs off the bed. his line was, i'm going to hit a lick. if i could just hit a lick. that means like really make a big sale. really find that gold, find that
4:46 pm
mineral. and, you know, he did oil boom happened in the late '70s. we were living high on the hogg and, boom, it crashed. we were down to nothing. he was broke. couldn't tell the difference in my father if he was broke or he was rich because he was still getting out of bed going, today's going to be the day. >> it's funny because a lot of cnbc people know the other mcconaughey. >> brewster. >> texas investments. >> we have a few investments. they've gone pretty well. >> what are some examples? >> we have some land, quite a bit of land places that we've purchased and sold it off for more than we purchased it for. >> who do you think has made more money, you or rooster? >> we have this discussion. we compete on this. he's sneaky though. he's sneaky. he's got so much inventory. if you pulled all his inventory out and added up the dollar amount, he might have me. he says he doesn't.
4:47 pm
he says i'm way ahead. he's sneaky. he's playing me a little bit. >> it brings me to the question we love to ask people who come through which is what are your biggest money mistakes? >> biggest money mistakes? >> yes. >> well, it's a lesson learned. it wasn't a mistake that broke my bank or anything but i did learn early that when someone wants you to loan them money, most of the times you're giving them money. you could really screw somebody up by giving them a large lump sum of money. i've learned that if you want to help people out, which i have and do, do it in installments because it's too much. you're ruining somebody. >> like they've won the lottery. >> yeah, what are you going to do with it? how many kids do we see screwed up that are born into -- >> professional athletes. >> millions. professional athletes all of a sudden get into this money. >> what would be your advice to people who are in their 20s? >> well, you know, there's a bit of a fib that we like to believe
4:48 pm
in sometimes where people go, just -- if you just do what you love. you don't always get to do what we love. we figure out how to love what we do? >> that's the galta quote. >> who says that? >> galta, the old german writer. striving for what you want to do and learn to love what must be done. >> i didn't know that. yeah, so people learn to like what you do. and self-reliance. you know, it's been coming up a lot when we're talking about what can the government do for us? what they can do but obama talked about it endlessly, and i wouldn't say we did a great job of following up, but he called us to arms from the beginning before he was even elected. all of his big ideas. he said none of this happens without you. we have to do something. we have to get up. >> let me ask you the final question because you sort of brought it up. why the political messaging? why the we will survive trump, the whole thing? what are you trying to say
4:49 pm
there? >> what am i trying to say? >> why get involved? why make it political? what's it all about? >> i don't know. maybe it's not -- i'm trying not to make it political. i'm going back to self-preservation and the only one that can change any of us is ourselves. so take some inventory in the mirror daily and we've got to go to work. let's go to work. i'm choosing not politically. i'm tired of talking about the sides, you know? it creates a movement when you have a gap in the middle and you're trying to bring two things together. >> you're not taking sides? >> i'm not taking sides. we all don't know what to do. >> we all have work to do. we have to get to work. i love that. thanks to matthew mcconaughey. "gold" is out in theaters january 27th. >> get to work and love it, whatever it is while you are there. >> i do subscribe to that as opposed to the typical
4:50 pm
commencement speech message which is just pursue your passions whether you can make a living at it or not. just props for turning an interview with matthew mcconaughey into i think there' there somewhere. i have half an idea what i'm talking about. the movie itself, i have to say the whole story. i was not even -- an infamous gold mining scandal. he was amused. this is the american way, the american dream. it's canadian. but same. gold mining is that kind of thing. >> at the time appaloosa was invested. >> the guys falling out of helicopters. it was a remarkable story. >> the mining scandal of the century. you can check out much more about that on the spark. now, retail stocks trading higher today after president-elect donald trump said the republicans' border tax
4:51 pm
plan is too complicated. we'll hear from the executives next. and coming up, the vice chairman of lionsgate. he's talking about 2016's blockbusters at the box office and why this year could be even bigger. gger.
4:52 pm
4:53 pm
hard to believe we are three days away from donald trump's inauguration. and here's more from the national retail federation's conference in new york city. what's the talk of the event? >> hi there. so this is the annual national retail conference and could not convention in new york city.
4:54 pm
the third of three days. while the expo is very much centered around the future of retail technology with presenters like oracle and mi o microso microsoft, it is centered on the resnail the consumer. so there was a q & a with bill dudley, the federal reserve ceo. and he gave his take on the gop proposed border tax adjustment plan. he's not so sure the dollar will appreciate the way economists think it will. if it does, it will happen smoothly and enough to offset the negative impacts for retailers and the consumer. and dudley is a little concerned about some unintended consequences. take a listen. >> for example, would it affect tourism. fewer people would come to the u.s. as tourists. more of us would go abroad. would it change the relative attractiveness of investing in
4:55 pm
u.s. assets. so the idea you can look at this little sector and the price oyl porting goods and assume it just passes right through to exactly the equivalent rise in the dollar. i'm sorry. i can't sign up to that proposition. >> so i think that retailers are starting to feel perhaps like they're being heard. not just the comments from dudley but also, as you mentioned, president-elect trump's comments to the "wall street journal" saying he believes the border tax adjustment is a little too complicated. so things seem to be feeling a bit of relief. not so much the last several days where there was a lot of worry about this. >> now they're thinking we're not the only ones. too complicated. thanks, courtney. up next, the gates foundation announcing a big move in one of will wall street's well known stocks. and tomorrow on worldwide exchange -- >> we are live at the world economic forum in switzerland. >> be sure to join us tomorrow morning. joining us at the top of the
4:56 pm
hour. reacting to all the latest headlines. geo politics, economics and markets right here cnbc. chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.
4:57 pm
this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at and get up to six hundred dollars. it's a performance machine. of engineering... with this degree of intelligence... it's a supercomputer. with this grade of protection... it's a fortress. and with this standard of luxury... it's an oasis. the 2017 e-class. it's everything you need it to be... and more. lease the e300 for $549 a month
4:58 pm
at your local mercedes-benz dealer. mercedes-benz. the best or nothing. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet? welcome bachblg we have a news alert on the gates foundation.
4:59 pm
>> the gates foundation is selling the majority of their berkshire hathaway holdings. class b shares, starting in july this year. over a three-year period they're selling 60 million class b shares. so if you do the math it translates to $9.5 billion in total at current pricing and warren buff set promising to give away the majority of his wealth. there you go. thats the latest from the gates foundation. >> any rationale for it? >> that's how you raise money to do philanthropic work. so the timing and the pricing, might as well. >> thank you. actually, they were up 25%. >> actually. it is a billion-dollar company. so i don't think it is material. so when warren buffett gives his stake to the gates foundation, it is to turn it into cash so the gates foundation can do its work. so the timing is interesting. right? maybe if you had a board of nonprofit, you decide to hang on and let it ride or maybe let it
5:00 pm
liquidate a little. now is a pretty decent time to sell. if you already own berkshire hathaway and you know he won't live forever, i don't think this changes it very much. >> we have to go. we'll see you tomorrow. that does it for closing bell. "fast money" begins now. "fast money" starts right now. overlooking new york city times square. tonight on fast, a theory could be signaling trouble for the markets and we'll tell what you it is. plus, lions'gate is behind la la land. and the box office boom is just getting started. we'll hear what's in store for 2017. and why the surge in stocksn


info Stream Only

Uploaded by TV Archive on